Business Briefing by Vietnam Net Bridge, 8 August 2015. Vietnam stands to gain from regional trade pact enforcement.
US Secretary of State John Kerry was in Hanoi this week “expressing confidence… (that the) ambitious TPP trade pact could be completed this year“. Meanwhile, negotiations with the Regional Comprehensive Economic Partnership (RCEP), which include Vietnam, Australia and China (but not the US, continue.
An edited extract of the original article appears below.
Vietnam is likely to face both opportunities and challenges when joining the Regional Comprehensive Economic Partnership (RCEP) with the scale tipped towards gains rather than losses, economists have said.
Negotiations on the RCEP commenced in 2012. The deal aims to reach a comprehensive economic partnership between the Association of Southeast Asian Nations (ASEAN) and six regional free trade agreement (FTA) partners, namely China, Japan, the Republic of Korea (RoK), Australia, New Zealand and India.
The RCEP region has a population of 3.4 billion, a combined GDP of 21 trillion USD, and trade accounting for 29 percent of the global figure.
Six rounds of RCEP talks were organised and negotiations are expected to conclude later this year.
As the agreement gathers a number of Vietnam’s major economic partners like China, Japan, Australia and ASEAN, it promises strong growth in trade between the country and these key export markets.
The pact will also bring about an inflow of foreign direct investment (FDI) which in turn will result in positive impacts such as transfers of technology and business and management skills that Vietnam needs.
The implementation of commitments stated in the RCEP will also help Vietnam create a competitive and transparent investment climate and participate in regional value and production chains…
CIEM researcher Dinh Thu Hang considered some sectors such as aquatic production, agriculture and construction to be the biggest beneficiaries of the RCEP while the liberalisation of services in the region will beef up trade in services and FDI in Vietnam.
Vietnam could export its distribution and hospitality services to RCEP members, especially Japan, ASEAN nations and Australia. Efforts to facilitate trade and development cooperation could also further reduce the expenses of service connectivity and goods trade, she said.
In a recent report, ANZ bank [Platinum Sponsor of AusCham] said Vietnam and Thailand will profit the most from the RCEP as the former’s GDP growth rate could reach approximately 8 percent and the latter’s figure could hit 13 percent in five years after the deal’s signing. FDI within RCEP members is expected to account for 85 percent of the global figure, critical to the Vietnamese economy…
Vietnam will also encounter strong rivals from RCEP countries in terms of banking services which have matured in Singapore, Japan, the RoK and Australia, economists said.
- To view the original and unedited article, click onto Vietnam stands to gain from regional trade pact enforcement.
- Photo Credit: RCEP members, as illustrated in Wikipedia.
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